CUBA: Restructuring debt after GDP outlook falls below initial forecasts due to crisis

Record ID: 1539789

  • Title: CUBA: Restructuring debt after GDP outlook falls below initial forecasts due to crisis
  • Date: 21st December 2009
  • Summary: HAVANA, CUBA (DECEMBER 20, 2009) (REUTERS) RAUL CASTRO, CUABN PRESIDENT, ENTERING ROOM TO PARTICIPATE IN NATIONAL ASSEMBLY CUBAN FLAGS VARIOUS OF PARLIAMENTARY DELEGATES APPLAUDING AT START OF NATIONAL ASSEMBLY PLENARY SESSION VARIOUS OF DELEGATES APPROVING ORDER BY RAISING HANDS CASTRO RAISING HAND TO VOTE DELEGATES APPLAUDING MARINO MURINO JORGE, ECONOMY AND PLANNING MINISTERO, ADDRESSING DELEGATES REGARDING 2010 BUDGET RAMIRO VALDEZ, CUBAN REVOLUTIONARY AND POLITICIAN, LISTENING ALONG WITH OTHER GOVERNMENT OFFICIALS (SOUNDBITE) (SPANISH) MARINO MURI�����O JORGE, ECONOMY AND PLANNING MINISTER SAYING: "Regarding what was specified to carry out the (economic) plan, the expected expenses in hard currency are less than what the country expects to receive in revenue. However, because of our existing financial commitments, the situation is very tight so we have begun talks to restructure our debt with some countries and some companies." RICARDO ALARCON, NATIONAL ASSEMBLY PRESIDENT, LISTENING WITH OTHER OFFICIALS SOUNDBITE) (SPANISH) MARINO MURI�����O JORGE, ECONOMY AND PLANNING MINISTER, SAYING: "The challenge for 2010 is not smaller. The foreseeable conditions demand greater effort and dedication. That's the commitment we need from our workers, our managers and our teams to move our economy forward and preserve the revolution's victories." DELEGATES APPLAUDING
  • Embargoed: 5th January 2010 13:54
  • Keywords:
  • Location: Cuba
  • Country: Cuba
  • Topics: Economic News
  • Reuters ID: LVABRH05X5NZHCI7QCZMVNAAF9G7
  • Aspect Ratio: 4:3
  • Story Text: Cuba's national assembly opened on Sunday (December 20) with the government announcing that the economy will grow 1.4 percent this year, falling short of official forecasts and causing the country to restructure some of its debt. This marks one of the country's worst performances in several years.
    Addressing the assembly, Economy and Planning Minister Marino Murillo forecast a modest economic expansion of 1.9 percent in 2010 and said exports are set to plunge by 22.9 percent, hit by lower global metals prices, slacker demand for cigars and lobster and lower income from foreign visitors.
    In response, the government would renegotiate some debt.

    "Regarding what was specified to carry out the (economic) plan, the expected expenses in hard currency are less than what the country expects to receive in revenue. However, because of our existing financial commitments, the situation is very tight so we have begun talks to restructure our debt with some countries and some companies," he said.
    Imports of goods and services are on track to tumble 37.4 percent this year, Murillo said, significantly faster than exports fell and suggesting some success in President Raul Castro's drive to reduce its hard currency expenses.
    Castro has made cutting imports a priority since he was sworn in as president early last year, replacing his ailing older brother Fidel by imposing some farming reforms in a boost to increase output and replace food imports. Cuba relies on imports for about two thirds of what it eats.
    The Cuban economy is suffering from financing problems that have been compounded by the global economic slowdown, which has sapped earnings from tourism and hit demand for key exports such as tobacco, nickel and petroleum derivatives.
    The government originally estimated 2009 growth at 6 percent but later slashed its outlook to 1.7 percent. This was a marked decrease from 2008 when Cuba's economy grew by 4.3 percent.
    Marino Murillo said Cubans needed to work harder in light of the difficult times.

    "The challenge for 2010 is not smaller. The foreseeable conditions demand greater effort and dedication. That's the commitment we need from our workers, our managers and our teams to move our economy forward and preserve the revolution's victories," he said.
    Cuba also said the country had reduced its budget deficit to 4.8 percent of gross domestic product (GDP) from 6.7 percent last year. The government's target for next year is for a budget deficit of 3.5 percent.
    Cuba's government uses a formula for calculating gross domestic product that takes into account free and heavily subsidized social services.
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